The 5-Month Futures Price on a Non-Dividend-Paying Stock Is $85

question 28

Multiple Choice

The 5-month futures price on a non-dividend-paying stock is $85.85. The risk-free rate is 1.0% and the market rate is 11.75%. What is the spot rate for this stock if spot-futures parity exists?

• A)$82.42
• B)$82.51
• C)$82.99
• D)$83.32
• E)$83.52

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